They have also been paying good dividend since 2010 with good dividend yield of 4.51% currently. Their payout ratio remains low which is very good considering the fact that they are paying 4.51% DY and also they have plenty of money left to spare for future expansions and also to save for the upcoming recession, being vigilant with their money and preparing for the worst is the best thing any company can do now that global GDP growth is slowing down.
They have also implemented a “Dividend Reinvestment Plan” since 2017 which is a good way for investors to reinvest and compound their wealth in the stock market. This is a huge benefit for investors who believe in the company and those who wants to compound their wealth in the stock market.
In contrast to their construction sector’s revenue which is fluctuating, their manufacturing sector’s revenue saw a huge spike on 2018 which they mentioned that they are focusing more on growing their manufacturing revenue while the government is still sorting out and discussing on the mega projects for the construction sector, which I think personally is a good way of being efficient in growing the company as a whole.
Their order book remains strong as they have managed to secure a total of 2.2 billion as of 31 Dec 2018. Their highest paying project in their order book is the Pan Borneo Highway in Sarawak.
On their Construction sector they are focusing on 74% for infrastructure projects and 26% for building projects. With their infrastructure projects they are well diversified taking up projects from many companies so even if one of them decided not to take up KIMLUN’s offer they still have many other companies who will still give business to them ranging from public and private sectors.
During the event they also mentioned that their gearing ratio is really low, this is due to the company’s effort in getting prepared for the recession, the below picture shows KIMLUN’s Net Gearing Ratio which is only 0.07 in the year of 2017 which is very low. From their 2018 annual report their Net Gearing Ratio calculation is as below.
Net Gearing Ratio = (Total Borrowings – Cash and Bank Balances) / Shareholders’ Equity
e.g: 2017 Net Gearing Ratio = (129.60 – 86.57) / 607.64 = 0.07
Manufacturing Business Segment
From their manufacturing sector they mainly have their sector to fully support their construction sector and also selling to other construction companies, in my opinion it is a very good as they are also supplying to themselves which reduces cost of buying from others.
Their sales order has a value of RM170 mil for new projects with 80% of the orders are from Singapore and 20% are from Malaysia, below are their list of outstanding orders.